Breakfast | US President Trump said that tariffs will start on August 1, and He Lifeng will go to Sweden to hold economic and trade talks with the US

July 28 - August 3 Weekly Major Financial Events Overview, all times are in Beijing time:

Key Focus: China-U.S. Trade Talks and August 1 Tariff "Deadline" are undoubtedly the focal points, as their outcomes will directly impact global trade dynamics. The Federal Reserve's interest rate decision is highly anticipated. The U.S. will also release key non-farm payroll data, GDP, and PCE data.

In Asia, the Bank of Japan will announce its target interest rate. As usual, China will hold a Politburo meeting at the end of July. China will also release official manufacturing PMI data.

The U.S. earnings season is entering its peak, with Microsoft, Meta, Apple, Amazon, Qualcomm, Boeing, and Starbucks announcing their earnings.

Financial Events

• He Lifeng, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will visit Sweden for economic and trade talks with the U.S. from July 27 to 30.

According to the Ministry of Commerce, He Lifeng will visit Sweden for economic and trade talks with the U.S. from July 27 to 30. According to Global Times, U.S. Treasury Secretary Janet Yellen announced during an interview with Fox News on the 22nd local time that the third round of China-U.S. trade talks will be held next Monday and Tuesday in Stockholm, Sweden. Previously, the two sides held two rounds of talks in Geneva and London. Reports indicate that August 12 is the deadline for the suspension of additional tariffs, and the latest round of talks aims to postpone this deadline.

According to CNBC, Swedish Prime Minister Ulf Kristersson later confirmed on the 22nd that Sweden will host the latest round of talks between Washington and Beijing. He stated on social media platform X, "This negotiation mainly concerns China-U.S. relations, but it also has significant implications for global trade and the economy."

In response, Chinese Foreign Ministry spokesperson Mao Ning stated at a regular press conference on the 22nd that China's position on tariffs is consistent and clear. China hopes that the U.S. will work with China to implement the important consensus reached during the phone call between the two heads of state, utilize the China-U.S. economic and trade consultation mechanism, enhance consensus, reduce misunderstandings, strengthen cooperation, and promote stable, healthy, and sustainable development of China-U.S. relations.

• The effective date of Trump's so-called "reciprocal tariffs" and 50% import tariff on copper

According to CCTV News, on July 15 local time, U.S. President Trump stated that the tariff imposition will begin on August 1.He also announced that a 50% tariff will be imposed on all copper imported into the United States starting August 1.

As of July 25, 2025, the progress of tariff negotiations between the United States and major economies is as follows:

Countries with agreements reached:

• Japan: According to Xinhua, the United States will reduce the tariff on Japanese automobiles from 25% to 15%. According to the agreement, Japan will invest $550 billion in the United States, which will receive 90% of the investment profits. Japan will open its markets for automobiles, trucks, rice, and certain other agricultural products and goods to the United States.
• United Kingdom: According to Xinhua, on the 8th local time, the United Kingdom and the United States reached an agreement on the terms of the tariff trade agreement. However, the previously imposed 10% so-called "reciprocal tariff" by the U.S. has not been canceled. The bilateral agreement covers tax reductions or exemptions for goods such as automobiles, steel and aluminum, beef, and ethanol.
• Indonesia: According to Xinhua, Indonesia has eliminated 99% of tariffs on U.S. goods, while the U.S. will impose a uniform 19% tariff on goods exported to Indonesia; Indonesia has committed to purchasing $15 billion in energy and 50 Boeing aircraft
• Philippines: According to CCTV News, the Philippines has canceled tariffs on American goods, while the U.S. imposes a 19% tariff on Philippine goods; the Philippine side promises to strengthen military cooperation.
• Vietnam: According to Xinhua News, Vietnam has canceled tariffs on American goods, while the U.S. imposes a 20% tariff on goods exported to Vietnam and a 40% tariff on goods transshipped through Vietnam from third countries.

Countries/Regions Still in Negotiation:

• China: A new round of negotiations will be held in Sweden on July 28.
• European Union: According to CCTV News, on the 25th local time, European Commission President Ursula von der Leyen held a phone call with U.S. President Trump to exchange views on the current U.S.-EU trade relations. Reports indicate that von der Leyen stated that she had a good conversation with Trump, and both sides agreed to meet in Scotland to discuss transatlantic trade relations.
• India: Media reports citing sources from the Indian government indicate that the prospects for reaching a temporary trade agreement between India and the U.S. before August 1 are bleak, as negotiations on reducing tariffs on key agricultural products and dairy products have stalled.
• Canada: According to Xinhua, Canadian Prime Minister Carney downplayed the possibility of breakthroughs in trade negotiations with the U.S. after an emergency meeting with local leaders on the 22nd, suggesting that the two sides may not reach an agreement.
• South Korea: According to Global Times, South Korea and the U.S. held a trade consultation meeting on the 25th. South Korea's Minister of Trade, Industry and Energy, Yeo Han-koo, arrived in the U.S. on the 22nd and stated in an airport interview that the current situation is very severe, and the government will do its utmost to negotiate with national interests as a priorityRecent news indicates that August 1 is not only the effective date for the newly set reciprocal tariffs but also the deadline for a large number of industry tariffs to be announced. According to Xinhua News, Trump also stated that the U.S. government plans to impose new tariffs on pharmaceuticals, semiconductors, and several other specific industries, citing that new tariffs on foreign-manufactured drugs could be as high as 200%.

• As per tradition, a Politburo meeting will be held at the end of July

As per tradition, a Politburo meeting will be held at the end of July, which will generally determine the policy tone for the second half of the year.

Based on the performance of China's economy in the second quarter, as well as a series of recent high-level meetings, State Council meetings, and departmental press conferences, Guosheng Securities' Xiong Yuan has five major forecasts for the mid-year Politburo meeting:

Forecast 1: In terms of the economic situation, it is expected to affirm that the economy has withstood pressure, remained generally stable, and improved steadily this year, but it will also emphasize that current internal and external pressures remain significant, including a complex and changeable external environment, insufficient domestic demand, and an unstable economic foundation.

Forecast 2: In terms of policy tone, the overall direction of expansionary policy and expanding domestic demand remains unchanged, and new incremental policies are expected to be introduced, but strong stimulus is unlikely; it is more likely to be "support without lifting."

Forecast 3: In terms of policy implementation, it is expected to continue to require efforts to promote the implementation of established stock policies and to continue to reserve incremental policies, with a demand for timely introduction, prompt implementation, and strict enforcement.

Forecast 4: In terms of key work, there will be particular attention to specific measures such as central leverage, anti-involution, regional cooperation, expanding domestic demand, promoting consumption, stabilizing the real estate market, stabilizing the stock market, expanding openness, strengthening industries, and promoting reforms. Among these, "anti-involution" may focus on areas such as new energy vehicles, and stabilizing real estate is expected to continue to strengthen, with further cuts in reserve requirements and interest rates anticipated.

Forecast 5: Planning for the "14th Five-Year Plan," the second half of the year is expected to hold the 20th Central Committee's Fourth Plenary Session to review the preparation suggestions for the "14th Five-Year Plan." As per tradition, the date for the Fourth Plenary Session is expected to be announced, and it may emphasize continued research on key issues such as economic and social development goals during the "14th Five-Year Plan," new types of productivity, expanding domestic demand, and common prosperity.

Economic Indicators

• FOMC Interest Rate Decision

Despite the ongoing calls for interest rate cuts in the market, economists unanimously believe that the Federal Reserve's meeting in July will not result in a rate cut. According to CME's "FedWatch," the probability of the Federal Reserve maintaining interest rates in July is 97.4%, while the probability of a 25 basis point rate cut is 2.6%; the probability of maintaining interest rates in September is 41.4%, with a cumulative probability of a 25 basis point rate cut at 57.2% and a cumulative probability of a 50 basis point rate cut at 1.5%.

Barclays Bank's senior U.S. economist Jonathan pointed out that tariff policy may be a key factor leading the Federal Reserve to remain on hold. Tariffs may be pushing up inflation while suppressing economic growth, and the Federal Reserve currently finds it difficult to accurately assess the specific combination of these two effects. In this uncertainty, the Federal Reserve has chosen to wait for more economic data to ensure the accuracy and effectiveness of policy adjustments. Millar stated:

"The Federal Reserve does not exactly know how tariffs will affect the economy, which is enough of a reason for them to be cautious."

Meanwhile, political interference in the Federal Reserve has become increasingly apparent, especially as U.S. President Trump publicly criticizes Federal Reserve Chairman Jerome Powell almost daily, accusing him of refusing to lower interest rates due to concerns about inflationary pressures from tariffs. This high-profile political criticism has raised deep concerns among economists about the independence of the Federal Reserve. In a survey, over 70% of responding economists expressed worry about whether the Federal Reserve can continue to maintain its independence from political influence, with 10 experts explicitly stating they are "very concerned."

It is noteworthy that despite a few voices within the Federal Reserve supporting interest rate cuts, such as Waller and Bowman advocating for a cut as early as the end of July, Powell's control over the FOMC remains solid. Under Powell's leadership, the Federal Reserve is more inclined to maintain policy stability until clear economic signals emerge. This "policy stalemate" may continue to dominate the Federal Reserve's decision-making direction in the short term.

• July Non-Farm Payroll Change (10,000)

Last month's data showed that U.S. non-farm employment growth exceeded expectations for the fourth consecutive month in June, demonstrating strong resilience in the labor market. April's non-farm employment figures were revised up by 11,000, and May's data was also revised up by 5,000; the unemployment rate further declined. Average hourly earnings increased by only 0.2% month-on-month.

The Minsheng Macro Tao Chuan Team believes that the June non-farm data presents a perfect combination: an increase of 147,000 jobs exceeded expectations, the unemployment rate fell to 4.1%, but wage growth slowed. The market has prepared psychologically in advance, transforming the data shock into a positive outcome. For the Federal Reserve, the data is relatively reassuring, locking in a wait-and-see stance, and the market has largely abandoned bets on a rate cut in July. However, there are hidden concerns behind the data: private sector employment unexpectedly declined, and manufacturing is under pressure.

• U.S. Q2 Real GDP Annualized Quarter-on-Quarter Initial Value

Last month's data showed that the final value of U.S. GDP for the first quarter was revised down to -0.5%, worse than the estimated -0.2%, reversing a 2.4% increase in the fourth quarter of 2024, marking the first contraction of the country's economy in three years. The decline mainly reflects an increase in imports and a decrease in government spending. Although investment and consumer spending have increased, they have not fully offset the negative impacts mentioned above

• U.S. June PCE Price Index Month-on-Month

Data from May shows that the U.S. core PCE price index slightly exceeded expectations, rising 0.2% month-on-month. Consumer spending fell by 0.3%, marking the largest decline since the beginning of the year; personal income experienced its largest drop since 2021, primarily due to a reduction in government transfer payments. This indicates that the uncertainty brought about by the Trump administration's economic policies is increasingly dragging down the economic growth outlook.

Deutsche Bank's latest research shows that after excluding the distortion effects of oil prices, the market-implied real inflation risk premium has surged to a ten-year high, only lower than the peak during the "Trump reflation trade" at the end of 2016. Against the backdrop of tariff threats and policy uncertainty, the potential risks of long-term inflation expectations in the U.S. are masked by falling oil prices, and the market's actual level of concern far exceeds the surface data.

• China's July Official Manufacturing PMI

Data from last month shows that China's June manufacturing purchasing managers' index, non-manufacturing business activity index, and composite PMI output index were 49.7%, 50.5%, and 50.7%, respectively, rising by 0.2, 0.2, and 0.3 percentage points from the previous month. All three indices have rebounded, indicating that the overall economic prosperity level in our country remains in expansion.

• Bank of Japan Announces Target Interest Rate

Currently, the market believes that the Bank of Japan may decide to keep the benchmark interest rate unchanged at 0.5%.

Officials believe that Prime Minister Shigeru Ishiba's recent electoral defeat has little impact on the central bank's gradual rate hike policy stance. One of the main considerations for delaying a rate hike is the ongoing U.S.-Japan trade negotiations. Officials hope to assess the potential impact of any trade agreements on inflation trends and the economy before raising rates again. According to CCTV News, Trump recently wrote to Japanese leaders, stating that a 25% tariff will be imposed on goods imported from Japan starting August 1.

In addition, the central bank is closely monitoring the Japanese government's fiscal policy trends. Bank of Japan officials believe that the upward risks of inflation are increasing. This is mainly due to the surge in prices of rice and other food-related items, with recent price growth exceeding the central bank's expectations. Insiders indicate that some central bank officials believe that if the government significantly relaxes fiscal policy, it will be necessary to monitor its upward impact on inflation. Data shows that Japan's June core CPI rose 3.3% year-on-year, slightly lower than the average economist forecast of 3.4%, and down from the 3.7% year-on-year increase in May (the highest in two years).

• U.S. July ADP Employment Change

Data from last month shows that U.S. June ADP employment fell sharply to -33,000, marking the first negative growth since March 2023, with an expected value of 98,000, while the data for May was revised down to an increase of only 29,000. Employment in the service sector experienced the largest decline since the pandemic

Financial Reports

More than 40% of the S&P 500 index constituent companies will intensively release their financial reports next week, with a focus on technology stocks including Apple, Meta, Amazon, Microsoft, and Qualcomm, which may lead to significant market volatility.

• Microsoft

Morgan Stanley recently released a research report providing a forward-looking analysis of Microsoft's fourth fiscal quarter performance, believing that its current risk-reward profile is attractive. The core logic lies in Microsoft's leading position in the artificial intelligence (AI) field, robust growth in core business, and operational efficiency advantages, which are expected to support mid-to-high single-digit total returns in the medium to long term. The rating on Microsoft is maintained at "Overweight," with a target price of $530.

Morgan Stanley stated that Microsoft is expected to benefit from its extensive generative AI investments and solution portfolio, which will support its stock price increase and future sustained growth. Coupled with Microsoft's strong capability in managing operating expenses, the firm is more confident that Microsoft can achieve sustained mid-to-high single-digit (15%-20%) total return rates in the coming years.

OpenAI's losses will impact earnings per share in fiscal year 2026, but the firm predicts that Microsoft will reach a loss cap of $13 billion in the fourth quarter of fiscal year 2026, which will significantly accelerate earnings per share growth in fiscal year 2027, exceeding 20%.

• META

According to analysts' consensus expectations, Meta's Q2 revenue is expected to be $44.71 billion, a year-on-year increase of 14%; adjusted net profit is expected to be $19.92 billion, a year-on-year increase of 10%; earnings per share are expected to be $5.85.

Reviewing Meta's performance over the past eight fiscal quarters, EPS has exceeded market expectations in all quarters, with an average stock price change of ±6.71% following earnings announcements, a maximum increase of +20.32%, and a maximum decrease of -10.56%. The probability of stock price increase on earnings announcement day is 62.5%.

Since 2025, U.S. stocks have experienced significant fluctuations. As a leader in the AI application field, Meta's stock price has still accumulated an increase of over 20%, significantly outperforming the S&P 500 index's 7% increase, as well as the increases of other tech "Seven Giants" like Microsoft and Amazon.

• Apple

Analysts generally believe that Apple's operating revenue for this quarter will reach $90.7 billion, an increase of 5.8% compared to $85.777 billion in the same period last year. This growth is mainly attributed to the comprehensive improvement across Apple's product lines, especially the outstanding performance of the iPhone. With an increase in shipment volume and average selling price, the iPhone's performance is expected to exceed market expectations by 2%.

In addition to the iPhone, sales of iPad and Mac products are also showing good growth trends, expected to increase by 9% and 1%, respectively. These figures not only reflect Apple's strong capabilities in hardware but also demonstrate its keen grasp of user experience and market demand.

It is noteworthy that investment banks have also raised their expectations for Apple's next quarter performance, predicting that operating revenue for the fourth quarter will increase from $95.7 billion to $96.5 billion, with earnings per share raised from $1.56 to $1.61, while gross margin expectations have also been increased to 46.1%These predictions undoubtedly instill confidence in investors, but the true performance of the market still needs to be validated by Apple's official financial report.

• Amazon

The market expects Amazon's revenue to reach $162 billion, with earnings per share projected at $1.32. Analysts generally believe that the continued growth of Amazon Web Services (AWS) and the expansion of its retail and advertising businesses will be key factors driving performance beyond expectations.

Amazon's AWS business has shown strong growth momentum over the past few quarters, becoming an important component of the company's revenue. Deutsche Bank analyst Lee Horowitz pointed out that despite tariff issues raising market concerns, AWS's revenue growth is expected to accelerate further in the second half of the year against a backdrop of strong consumer performance. Analysts emphasize that the application of generative artificial intelligence (GenAI) is transforming Amazon's logistics and operational models, reducing costs while improving efficiency. Additionally, Needham investment bank analyst Laura Martin mentioned that the record sales during Prime Day also provide strong support for Amazon's future growth.

Analyst Luca Socci stated that Amazon is witnessing the rise of a new leader in robotics technology, particularly in its progress with autonomous taxis (robotaxi) and self-developed AI-supported chips. These technologies will not only enhance Amazon's market competitiveness but may also provide new revenue sources. Analysts generally believe that Amazon's logistics system is achieving structural cost reductions through the application of AI, further enhancing operational efficiency.

• Qualcomm

Last month, American chip giant Qualcomm announced it agreed to acquire the UK semiconductor listed company Alphawave for approximately $2.4 billion (about 17.2 billion RMB). The transaction still requires regulatory approval and is expected to be completed in the first quarter of 2026. Upon completion of the acquisition, Alphawave will be delisted and operate privately under Qualcomm Group.

• Boeing

According to InvestingPro's forecast, Boeing's earnings per share are expected to increase by 51% year-on-year to -$1.4, with revenue expected to grow by 27% year-on-year to $21.45 billion. Boeing recently released its forecast for commercial aircraft demand over the next 20 years, expecting to deliver 43,600 new aircraft by 2044. On July 21, Indonesia's Coordinating Minister for Economic Affairs Airlangga stated that Garuda Indonesia is still negotiating with Boeing to purchase 50 aircraft, with no agreement reached yet. The U.S. Department of Commerce announced on July 17 that Bahrain Gulf Air has signed an agreement with Boeing to purchase up to 18 787 Dreamliners, valued at $7 billion.

Morgan Stanley believes that Boeing's long-term development trend has not been affected by the recent 737 MAX incidents, and global aviation demand and Boeing's capacity expansion remain optimistic. Analysts pointed out that rising fuel costs may drive airlines to replace older aircraft models, highlighting the cost advantages of replacing Boeing 737 MAX and Airbus A320neoBoeing's target price has been raised from $200 to $235, maintaining an "overweight" rating.

• Starbucks - T

Facing intense competition in China, Starbucks recently launched free study rooms to seek growth. The company has introduced free "study rooms" in some of its stores in China as a latest measure to cope with the intensifying domestic competition and boost foot traffic in its second-largest market. Starbucks China announced this week on its official Weibo account that it has launched "study room" areas in some stores in Guangdong (Guangzhou and Shenzhen regions), and there is no requirement to make a purchase to use these areas. The new study areas do not require reservations and have no time limits for use. Stores provide free power outlets, free warm water, and more.

• WuXi AppTec

On July 24, WuXi AppTec's stock price hit a 60-day high, closing at 87.0 yuan, up 3.5% for the day, with a turnover rate of 1.93% and a trading volume of 479,800 hands, totaling a transaction amount of 4.117 billion yuan. The stock is a hot concept stock related to Healthy China, precision medicine, CAR-T therapy, pharmaceuticals, PD-1 inhibitors, innovative drugs, and leading companies going overseas. In the last 90 days, 19 institutions have given ratings for the stock, with 18 buy ratings and 1 overweight rating; the average target price from institutions in the past 90 days is 85.95.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk